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Independent Bank (IBCP) to Buy Back Shares: Is it Worth a Look?

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Independent Bank Corporation (IBCP - Free Report) has announced a new share repurchase plan, under which it is authorized to repurchase up to 1,100,000 shares. This makes up about 5% of its common stock.

Repurchases under the program can be executed either through the open market or privately negotiated transactions, depending on the market conditions and other factors. The plan will expire on Dec 31, 2021, and can be terminated at any time without prior notice.

Independent Bank has been rewarding shareholders through regular buybacks. Earlier in December 2019, the bank had authorized 1,120,000 shares or 5% of issued shares and outstanding common stock (as of Dec 31, 2019) for repurchase, which is set to expire by 2020.

As of Dec 30, 2020, the company had repurchased 708,956 shares at an average price of $20.07 per share.

Apart from share repurchase authorizations, Independent Bank has been paying regular quarterly cash dividend. Since 2015, the company has been increasing its quarterly dividend on an annual basis. The last hike of 11.1% was announced in January. Considering the last day’s closing price of $18.11, the company’s dividend yield currently stands at 4.4%.

Independent Bank’s financials are supported by strong balance sheet. As of Sep 30, the company had total debt worth $108.8 million, higher than the total cash and cash equivalents balance of $42.4 million. Yet, its total debt to total capital of 22.6% at the end of the third quarter improved sequentially. Also, the company’s times-interest-earned of 20.8 at the end of the September quarter improved from the prior quarters.

Given the earnings strength and decent liquidity position, the company might be able to sustain the current level of capital deployment program.

Shares of Independent Bank have jumped 32.5% over the past six months, significantly outperforming the industry’s rally of 26%.

Currently, the stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

New Share Buyback Plans by Other Banks

Recently, Banner Corporation (BANR - Free Report) authorized the repurchase of up to 1,757,781 shares i.e. 5% of its common stock. Also, Shore Bancshares’(SHBI - Free Report) board of directors approved the repurchase of up to $5 million of the company’s common stock through Dec 31, 2021.

Byline Bancorp, Inc. (BY - Free Report) board of directors adopted a share repurchase program, which authorized the buyback of up to 1.25 million shares.

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